We’ve also scoured the job hunting world for some valuable information for employers on how to find and keep employees worth their weight in gold.
Top 3 ways to check your salary is fair
1. Minimum entitlements by law
The most important thing to know is what you are entitled to by law when you’re working as an employee.
First up, the minimum wage before tax set by the government in 2015 is:
- Normal full-time workers: $14.75 per hour, or $590 for the standard full-time, 40-hour working week.
- Trainees and “starting-out” workers: $11.80 per hour.
- Young workers under 16 years old: Unfortunately there’s no minimum wage set for you, but you can still make sure you get paid fairly.
Secondly, when it comes to overtime, a shocking 62% of non-award staff are not paid for their overtime work, according to a 2015 Hays survey.
Joining a union is one of the easiest ways to make sure that you will get paid what you are entitled to – the government recommends it. For the cost of one flat white or beer every week, you can join a bunch of people who will help you stand up for yourself with your employer and fight for your rights in the industry at large. You can find the union for your industry on the NZ Council of Trade Unions website.
Knowing whether or not you’re in a high demand role can also give you more bargaining power around your salary. Check Immigration New Zealand’s list of what industries and jobs are currently looking for workers to find out if you’re in a high demand role.
2. Online salary checkers
PayScale has the world’s largest database of salaries. Their fastest and easiest tools are the Pay Calculator for New Zealand, which gives a quick set of low-to-high salary numbers, and the average pay finder tool for your job across the country.
You can also request a free personal report about your position. You have to fill in a pretty full-on survey for the report, but it’s worth it. Their comparison tool shows where you sit within the industry and what percentage of people in your job are being paid more or less than you are.
Trade Me’s salary guide is simple: a list of occupations with a range of salaries and the midpoint (median) salary you can expect.
The Michael Page salary centre is an online salary checker that can be quite useful – but the industries it surveys are rather limited.
You should also take a look at the basic averages listed on the SEEK NZ website.
3. Salary guide reports
Downloadable salary guide reports (usually in PDF form) may not seem as useful as a search function that gives you a salary figure to compare straight away – but they are actually priceless. These reports contain piles of info around industry trends, way beyond the mere dollar figures.
If you want to know why salaries are growing quickly – or not growing – or what employers are looking for when giving out pay rises, a salary guide report is a good place to look.
Reports are typically useful if you’re in a relatively standard job, but you can’t expect them to cover sectors such as the creative industries well, sorry.
A Hays Salary Guide is available for many different industries, with a comparison across New Zealand and Australia.
The Hudson salary guides are the most comprehensive ones we’ve seen in downloadable PDF form. They provide individual salary guides for each industry, comparing salaries in multiple different cities per state in New Zealand.
The Robert Half 2015 Salary Guide has a limited number of industries that it covers, but it provides a wealth of information to make up for this. They analyse everything from how the jobs economy is going, to how employees can get a pay rise and how employers can find and retain good employees.
Why you need to know what you’re worth
How much you get paid can make a huge difference to how much you have in KiwiSaver or superannuation when you retire. It’s always a bit stressful talking with your employer about how much money they pay you, but Future You will thank you.
At least we’ve taken the stress out of looking for a good value account to save for your future. Compare KiwiSaver funds on our website today to see how your fund is performing.
The lessons for employers
Yearly pay rises keep your employees happy and solvent
According to the Hays 2015 Salary Guide, lots of Kiwis and Aussies are probably getting paid less than they could, as 17% of employers did not increase salaries at all in 2014-2015. As for the 2015-2016 financial year, only 13% plan not to increase salaries at all, but a growing 65% of employers plan to increase salaries by less than 3%. This gives employees the message that they are not being noticed or rewarded for taking on new responsibilities or doing an amazing job.
56% of employers increased salaries by less than 3% last year. That’s a raise roughly equivalent to our national average inflation for the past decade (2.7% according to the Reserve Bank), which means employees can continue to afford the cost of living.
Employers who do not increase salaries will find they have made a big mistake. According to the Robert Half 2015 Salary Guide for New Zealand and Australia, 31% of Kiwis leaving a job do so to find a higher salary.
Employees want to know where they stand
According to the Robert Half 2015 Salary Guide survey, the bulk of Kiwis want employers to discuss salary expectations as soon as they apply for the job. But the majority of HR Managers said they expect to talk about salary expectations after the second interview, which is clearly out of line with what most employees want.
- 49% say employers should discuss salary during the initial application process or the first interview.
- 30% say employers should bring it up during the second interview.
- 20% say pay discussions belong in the final interview.
A recent survey of 71,000 employees by PayScale showed that whether employees are being overpaid or underpaid, we all want our employers to communicate clearly why we’re being paid at our level, and what it takes to get to the next level. This was even more important than career advancement opportunities, appreciation from the boss, or optimism about the company’s future.
Companies who communicated clearly about pay had far better employee satisfaction levels and far fewer employees planning to quit.
The majority (2 in 3) of employees felt they were being paid below market rate – even if they were being paid market rate or higher. And a huge number of employees – 60% of those who thought they were underpaid and 39% of those who thought they overpaid – were intending to leave.
Employees across the board wanted to know:
- How their pay is being determined
- How pay relates to performance
- How pay relates to responsibility
- What it takes to get to the next pay grade
- Where their salary sits when it comes to their comparable talent pool
Lessons for small businesses
The study showed you don’t necessarily need to bankrupt yourself paying sky-high salaries. When employers communicated honestly about their reasons for paying lower than the market average, 82% of employees were happy to stay and accept that amount.
Lessons for large businesses
The study proved that overpaying someone to encourage them to stay – without talking to them about how they place in the market – will not keep them satisfied.
The bottom line for employers
In order to keep your employees happily engaged, communicate openly with them about how you are paying them compared to the market. It’s free to do some market research and have a conversation with your staff, and the result of keeping your best employees is priceless.